Banks Seek SME Growth by Embedding Business Tools in Digital Banking

Disconnected tools put banks at risk

Banks risk losing their place as small businesses’ primary financial partner when daily work happens across disconnected apps. BankiFi CEO and founder Mark Hartley argues banks can respond by bringing business workflows into their digital channels through specialist partnerships. The case rests on a practical shift in what business customers expect from a banking relationship: access to an account is only one part of managing a company’s finances.

In written responses to The Fintech Times, Hartley said the goal is to let small and medium-sized enterprises access the services they need to run their businesses through a bank’s mobile or online platform. He cited 2025 research by JumpCloud reporting that 51 per cent of UK SMEs use five to ten applications and 83 per cent would prefer a single place to access them. Those figures point to a familiar operational problem: businesses may have tools for individual tasks, but still face the effort of moving between them and keeping information aligned.

A unified entry point could reduce that friction, though a single interface doesn’t automatically mean that the underlying services are connected or easy to use. Banks would need to make the handoffs between banking and business software work in a way that saves customers time. (And this is the part most people overlook.) The quality of integration matters as much as the number of services on offer.

That gap creates a commercial question for established banks. Hartley said balances and payments alone no longer meet business customers’ expectations, which increasingly extend to invoicing, bookkeeping, cashflow and tax. He said open banking and real-time data sharing have raised expectations for connected services, while neobanks helped set the pace by integrating tools into their platforms early. For a business owner, the appeal is less about adopting technology for its own sake than reducing the administrative work around routine financial tasks.

Market share and the partnership case

Hartley said BankiFi research indicates that mainstream banks captured fewer than 40 per cent of the 800,000 new business current accounts opened in 2025. That is a company estimate, and it supports his warning that banks focused mainly on accounts and payments could lose current account share, deposits and long-term profitability. The figure signals a competitive challenge, but it doesn’t by itself establish why businesses chose other providers or whether they’ll remain with them.

This is more significant than it looks if the account is the first step in a broader relationship. When businesses handle invoicing, bookkeeping and cash management elsewhere, another provider may gain a regular role in their financial routines. Banks could then find it harder to understand or serve a customer’s needs through the account alone. The risk is gradual: the core account may remain open even as more of the working relationship shifts to other platforms.

His proposed response is to partner with specialist providers instead of building every service in-house. Banks can retain responsibility for core products such as accounts and payments, while partners supply workflows including invoicing, accounts payable and receivable, and bookkeeping. Hartley’s argument is that this approach can extend banks’ digital services without requiring them to develop and maintain each capability themselves. Here’s the thing: partnerships can speed access to specialist tools, but they also leave banks dependent on the quality and reliability of outside services.

He pointed to BankiFi’s work with Lloyds Banking Group, which provides SMEs with invoicing, payments, bookkeeping, tax and cash visibility through the bank’s digital channels. Hartley also cited partnerships with The Co-operative Bank and Metro Bank as examples of the model in practice. These relationships show that large banks are willing to work with specialist providers, though BankiFi’s commercial interest in that model is central to its case. The examples establish that partnerships are being used; they don’t, on their own, show how customers rate the services or what effect they have on retention.

Execution will shape the customer relationship

For Hartley, the value of integrated banking depends on whether it makes routine business tasks faster and simpler. He cautioned against treating a larger feature list as the measure of progress: the aim, he said, is to build connected services into how businesses work day to day. A crowded platform can add complexity if customers have to learn separate processes or repeat information across tools.

He described the main barrier as cultural, saying banks need to move from developing everything internally to adopting a partnership-led approach. That model also places high demands on providers, which must meet banks’ expectations for security, resilience, governance and compliance. Those requirements are part of the operating challenge, not a box to tick after launch: a service that fails or creates uncertainty can weaken the trust the bank is trying to extend through the partnership.

If you're working in this space, the question is whether the service fits into a customer’s existing routine and performs reliably when needed. Banks also have to decide how responsibility is shared when a partner supplies part of the experience. The customer may see one digital channel, but several organisations can sit behind it.

Over the next five years, Hartley expects integration to work in both directions: banks will embed outside services in their own channels, while banking capabilities will appear within software that businesses already use. In his view, banks that build strong partnerships can remain close to customers’ financial lives. Those that stick to basic accounts and payments risk ceding the wider relationship to other providers. That said, the direction he describes is an expectation, not proof that every bank or business will adopt the same model.

The test is whether integration changes outcomes

Whether this strategy can reverse the reported shift in new business account openings remains to be seen. Its commercial test will be whether integrated services help mainstream banks attract and retain more SME customers as their partnerships reach the market. It will also depend on whether those services solve recurring problems well enough to become part of daily business operations.

For banks, the challenge is to connect a wider range of services while preserving confidence in the core relationship. For providers, success depends on fitting into banks’ operating requirements and customers’ working habits. The pitch is clear. The results still need to follow.

The post BankiFi’s Hartley on Banks Becoming the SME Gateway appeared first on The Fintech Times.